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ECO- Example of a Firm with Market Power

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Question;a. Using the data in the in-class handout "Example of a Firm with Market Power" (Classes #4 and #5), calculate the price elasticity of demand between the prices $22 and $21, showing your calculation and reasoning. Is demand elastic or inelastic (with a bit of explanation)?;b. Using data from the table on p. 409 in the text, find the price elasticity of demand for coffee. Translate that number into a sentence or two that might make sense for a colleague without economics training.

 

Paper#57734 | Written in 18-Jul-2015

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